We all can agree that running an Association requires a lot of time, experience and expertise. There is a team of vendors and people that work in the community daily to ensure that the community is maintained and is operating smoothly. Many Boards ask for guidance on whether to directly employ service providers or whether to hire a third party company to handle maintenance needs. In this article, I will talk about some pros and cons of both.
Many Associations consider hiring a management company to staff an on-site manager and other dedicated people like valet and concierge services. Alternatively, we have also seen Associations who directly hire their on-site team. Which is better, and why?
Here are the benefits of staffing through a third party company:
California has instituted some new laws in the last several years, requiring that employees undergo harassment training. Many Associations who directly employ managers may not have any idea that this has become a requirement. If an Association does not regularly solicit counsel's advice, there are blind spots that can be overlooked.
A third party can provide employee handbooks and offer a structure that would otherwise cost the Association quite a bit of money to establish and update.
A third party should assist in facilitating safety inspections and ensure that safety guidelines are regularly discussed with your employees.
Many employees are looking for robust benefits packages. Third-party companies may have more resources to better afford and provide benefits to appeal to better qualified candidates.
Having a third-party staff your employees can ensure that your Association limits liability in matters like wrongful termination and other employee / employer claims.
A third-party can more easily offer coverage for an employee who is on vacation or is terminated or quits. A company who offers staffing generally has resources and awareness of how best to recruit new talent for clients.
A human resources manager will be the point of contact for employees, ensuring that annual reviews, write ups, benefits administration, payroll processing, etc. is all smoothly facilitated.
On the other hand, there are also some challenges when using staffing services. Here are some cons:
The Board will not pay additional fees for the services outlined above. Any third-party will charge a profit of anywhere from 5-25% on base salaries.
The Board has more control over job descriptions and implementation and discipline that is needed.
When working with a long-term employee, there is a great sense of loyalty established between the community and the long-standing employee(s).
Overall, with rapidly evolving employer legal requirements, it is my belief that hiring employees directly has become more cumbersome and a bigger liability for Associations. Check with your management company on the possibility of staffing. This is a service we frequently offer to our communities, and we are thrilled to be able to offer that support and protection.